Killing the Golden Goose
Last week in this space I wrote that there is nothing rational about being a sports fan. Apparently, that principle extends to the business of professional sports as well. It never ceases to amaze me how the owners of pro sports franchises, who are generally successful in other walks of their business ventures, can be so foolish and short sighted when running their teams and leagues.
A case in point is the pending dispute in labor negotiations between the National Football League and the NFL Players Association. In spring of 2006, NFL owners voted 30-2 to extend the collective bargaining agreement with it’s players for another 6 years. But by May 2008, NFL owners unanimously voted to invoke an early opt out clause in that agreement. What changed in the interim? Well, the economy went into the tank and a few influential owners, notably Dallas honcho Jerry Jones, overextended themselves by building new stadiums such as Jones’ tribute to wretched excess that is the new Cowboys Stadium.
The result is that the 2010 NFL season will be played without a salary cap and the 2011 season may not be played at all as there are already indications that the owners are preparing for a lockout in the event that they can’t agree on a new contract.
In the past when issues crept up between players and owners regarding collective bargaining (read: money), I’ve usually come down on the side of management figuring that players make hundreds of thousands, if not millions, of dollars to live a life that most fans would envy. I’ve also believed that players often underestimate the investment that owners make in their franchises.
But this time I find myself backing the players position. Why? Because, make no mistake, this dispute is as much between owners as it is between owners and players. At the heart of this disagreement are concepts like the salary cap and revenue sharing among teams. Owners like Jones and Washington’s Daniel Snyder would like the freedom to mismanage their teams as they see fit with little interference from the rest of the league. That goes against the business model that has made the NFL far and away the most successful of any pro sports league.
Unlike other sports, the NFL had the perfect system in place. Because of revenue sharing and the salary cap, teams are at least starting from a mostly level financial playing field. The popularity of the sport on TV allowed teams to make millions of dollars in revenue before a game is even played. And, while bonus money paid to players can be high, there are few guaranteed contracts that bind a team to a player who underperforms a la major league baseball or the NBA.
It’s difficult for the average person like myself to feel much sympathy for parties arguing over how to split up a billion dollar pie. But, as a football fan, I want to know that the games I enjoy are going to continue. And as a Green Bay Packer fan, I want to be reassured that the future of my favorite team is not going to be jeopardized by a few irresponsible owners.